The Americas

Canadian politics

Going for the jugular

THE last time Stephen Harper tried to cripple his rivals by cutting their public funding, it almost cost him his job. In 2003 Canada's scandal-plagued Liberal government sought to clean up its image by reforming the country's campaign-finance rules. It passed a law that capped donations to parties by companies and unions at C$1,000 ($1,025) and limited individual contributions at C$5,000. To cushion the impact of the tough new restrictions, the law also introduced a subsidy to parties of C$1.75 per vote received at the last election.

Three years later, Mr Harper's Conservatives ousted the Liberals and formed a minority government. Because the Liberals, who had historically relied on big corporate contributions, had far fewer small donors than the Conservatives did, the new rules left them much more dependent on the public subsidy. The new prime minister—who has never made secret his wish to crush the Liberals, who ruled the country for most of the 20th century—promptly went after their financing.

In 2006 he banned corporate and union contributions altogether and cut the individual-donation limit to C$1,000. Then in late 2008 he proposed axing the per-vote subsidy, which costs the treasury C$30m a year. The plan united the previously fragmented opposition, consisting of the centrist Liberals, the leftist New Democrats (NDP) and the separatist Bloc Québécois, since it would have devastated them all financially. They revolted, attempting to topple the Conservative minority government and form a coalition to replace it. In order to remain in power, Mr Harper dropped the offending measure and suspended Parliament for almost two months.

This year, the Liberals tried to boot Mr Harper by other means, staging a no-confidence vote that forced a federal election. The tactic backfired. On May 2nd, voters gave the Conservatives their long-sought-after majority and abandoned the Liberals: they fell from holding 77 of the House of Commons' 308 seats to just 34, leaving them with the ignominy of third-party status. It was no surprise that one of the Conservatives' first uses of their newfound strength was to re-fight the battle they lost in 2008.

On June 6th, the government presented a budget that would axe the per-vote subsidy. Jim Flaherty, the finance minister, justified the proposal on the grounds of fiscal restraint and strengthening “government integrity and accountability”. But the subsidy is such a small part of overall public spending that eliminating it would barely move the needle on the deficit. And if the Conservatives were really concerned with cleaning up the campaign process, they might have listened to Elections Canada, the non-partisan body that oversees elections and party financing. Its chief recently called for political parties to lose their exemption from the financial disclosure rules that currently apply to individual candidates. Mr Harper has not taken up the suggestion.

Instead, the Conservatives are clearly seeking to use the power their new majority gives them to reduce the risk they will lose it in the future. In 2010 just 37% of their funding came from the public till, versus 50% for the NDP and the Liberals and a whopping 82% for the Bloc Québécois. In the long run, losing the subsidy might conceivably benefit the Liberals, by forcing them to reconnect with their supporters in order to match the Conservatives' formidable network of small donors. But any reader of John Maynard Keynes knows what happens in the long run. And the prime minister is doing his best to make sure the Liberals suffer that fate before they can regroup.

Readers' comments

Why should taxpayers be forced to finance political parties they despise?

Why should they be forced pay for politial parties at all?

Does not sound very "free market" to me, "free market" Economist.

Especially as the political parties crying for forced subsdies were the socialist NDP and the Liberals (who under the academic/television presenter new leader went way to the left - hopefully sanity will be restored under new leaderhip). Why should the Economist magazine want to support them?

It almost makes me believe the conspiracy theories...... a lot of big business (although not all) being claimed to be anti (not pro) free market, and in alliance with governments and the academics (and so on), to create a "Progessive world order".

Why is it that The Economist's Editor-in-Chief John Micklethwait is out meeting with the most powerful people in the world right now at Bilderberg but the Magazine isn't running a single article on the meeting? It's arguably bigger than Davos or a G8 meeting in terms of power. The drudgereport and infowars are both covering the secret meeting and naming names galore. Grow up Economist, we're not as ignorant as you think. JFK gave a speech about this kind of secrecy and the role of the press: http://www.youtube.com/watch?v=xhZk8ronces

Very accurate post. Those concerned with funding parties they do not support are misguided, since the party they supported in the last elections is the one to receive the contribution associated with their vote. No voter is supporting a party he/she does not support with the per-vote financing system.

Healthy politics is essential to a strong economy-and that starts with ensuring that all parties can do their work adequately.

The Conservative Party of Canada isn't much of a party at this point in time: it's run by Mr Harper for Mr Harper. I don't have anything against the party but I really don't like the way it's run; all evidence points to him by very good at what he does though so full marks to him.